Washington State Congressional 2010 Update

1. Washington State Congressional2010 Update Risk Management Agency Spokane Regional Office Spring 2010

2. Overview General update on the Federal crop insurance program in the State of Washington: • Insurable Crops in Washington • Federal Crop Insurance Participation • General Program Update • 2010 Changes • Cherries – New ARH Program • 2011 – New Common Crop Policy • Partnership Agreements

3. RMA/FCIC SRA 16 Private Insurance Companies Insurance Agents (25,000+) Loss Adjusters (5,000+) FCIC Approved Insurance Policy Agricultural Producers (1.1 Million Policies) 264 M Acres $79.95B in Coverage Premium Subsidy Federal Crop Insurance Private Sector Delivery System 8 writing in WA

4. 2010 Insurable Crops in WA • Apples, Barley, Blueberry, Cabbage, Canola, ARH Cherry Pilot,Corn, Cranberries, Dry Beans, Dry Peas, Flax, Forage Production, Forage (Alfalfa) Seed Pilot, Grapes, Table Grapes, Green Peas, Mint, Mustard, Nursery, Oats, Onions, Pears, Potatoes, Processing Beans, Processing Sweet Corn, Safflower, Stonefruit, Sugar Beets, and Wheat • Adjusted Gross Revenue Pilot (AGR) • Adjusted Gross Revenue-Lite (AGR-Lite) • Pasture, Rangeland & Forage (PRF) Pilot • Livestock Risk Protection – Cattle, Swine, Lamb • Apiculture (API) Pilot • Livestock Gross Margin Dairy Cattle Note: Program availability varies by county and subject to change

5. 2010 Crop Insured By-State/County Post on RMA Spokane RO Internet Page http://www.rma.usda.gov/aboutrma/fields/wa_rso/

6. PNW Total Crop Insurance Participation 2009 Losses = $502 Million * data not final updated 2/2010

7. Washington Insurance Participation – All Crops * data not final Updated 2/2010

8. Washington Loss Payments – All Crops * data not final updated 2/2010

9. 2009 Insurance Participation Washington State - Fruit +3K ac +$97M +$105M +$5M +$1.1M Updated 2/2010

10. 2009 Insurance Participation Washington State – other select crops +48K ac +$10M -$12.5M -60K ac -12.5K ac -$.5M +$317M +180K ac updated 2/2010

11. FSA Uninsured NAP Program also available Additional coverage and endorsement available for some commodities Our job to tailor programs and coverage for producers we serve * New Program for 2010

12. Multiple Peril Crop Insurance (MPCI) • Protects producer’s loss of revenue resulting from low yields • Based on Producer’s individual Actual Production History (APH). • Actual Production History (APH): Actual amount of production from a farm unit used to determine the insurance guarantee (4 build to 10 average) • Insured can purchase from 50 up to 75% (85% on some crops) coverage based on Average APH on Insurance Unit • If unit yield is below production guarantee insured gets paid a set amount (price election) for every bushel/lb, etc. below production guarantee. • Most crops include quality coverage

13. MPCI – Causes of Loss • Adverse weather conditions • Fire • Insects • if adequate control measures applied • Plant disease • if adequate control measures applied • Wildlife • Earthquake • Volcanic eruption • Failure of the irrigation water supply due to an unavoidable cause of loss occurring within the insurance period

14. Revenue Plans Available in PNW • Revenue Assurance (RA) • Barley Idaho, Oregon and Washington – Spring Only • Canola Idaho AND NEW for 2010 Oregon and Washington Spring Only • Wheat Idaho only – Winter and Spring • Income Protection (IP) • Barley Idaho, Oregon and Washington • Wheat Idaho Oregon and Washington • Crop Revenue Coverage (CRC) • Corn Idaho, Oregon and Washington • Wheat Idaho, Oregon and Washington These products provide coverage to protect against loss of revenue caused by low prices or low yield’s or a combination of both.

15. Other Revenue Based Plans Revenue Plans • AdjustedGrossRevenue * • AdjustedGrossRevenue-Lite (AGR-Lite) * • Livestock Risk Protection (LRP) [Cattle, Sheep, Swine] • Livestock Gross Margin (LGM) [Dairy] Program availability varies by crop / state / county & is subject to change. *whole farm insurance – all ag commodities produced are eligible for insurance based on insured adjusted gross revenue on a whole farm basis. Nearly 100 different commodities insured in Washington State many of which don’ t have separate MPCI policies available.

16. Catastrophic (CAT) Crop Insurance • What does this policy cover / provide? • Catastrophic loss • 50% deductible • 55% of established price • Basic Unit • What doesn’t this policy cover / provide? • Optional units • Price fluctuation on crops like wheat/barley with revenue protection • Other policy options Cost: $300 per crop / county * *Waivers are available to Limited-Resource Farmers

17. Recent Program Changes in Washington • Barley and Canola Revenue Assurance (RA) • Expansion into all Barley and Canola counties • Potato Policy • Whatcom County: Final Planting Date changed from May 31 to June 15 • Grape Policy Changes for 2010 • Insure by varietal type, (expanded from 5 groups to 23 varietal specific types) • May insure the value of grapes at the contract price (less harvest cost) • Expanded into seven Western Washington counties: Clark, Island, Kitsap, Mason, Pierce, San Juan, Skagit

18. Recent Program Changes in Washington • Mustard Policy • Converted to regulatory program (Asotin, Columbia, Garfield, Lincoln, Spokane, Walla Walla, and Whitman). • Cabbage Policy • Insurance will not attach to any acreage planted to cabbage or any other Brassicaceae crop (e.g., cauliflower, broccoli, etc.) in either of the two previous crop years unless a written agreement request is initiated prior to sales closing date. • Specialty Use Barley for 2010 • 5 types covered • Must be under contract • Allows insured to insure based on contracted price • Implement of 2010, except fall barley counties will be implemented in 2011

19. Recent Program Changes in Washington • Dry Peas / Lentils • New policy 2009 • Expanded into Douglas County, WA for 2010 • Fall and Spring planted Austrians, • Fall and Spring planted Smooth Green or Yellow • Fall and Spring planted Lentils • Winter Coverage for 2010 • Asotin, Douglas, Lincoln, Whitman • Buckwheat • WA Expansion 2010 • Grant, Franklin and Walla Walla counties • Apple Policy • Proposed rule is out for comment. RMA plans to have the final rule published for 2011 crop year.

20. Recent Program Changes in Washington • Livestock Gross Margin (LGM) • Expanded into all WA counties • The Livestock Gross Margin for Dairy Cattle Insurance Policy provides protection against the loss of gross margin (market value of milk minus feed costs) on the milk produced from dairy cows. • Livestock Risk Protection - Lamb • Expansion to Washington State • Changing the limit for an individual Specific Coverage Endorsement (SCE) from 7,000 to 2,000 head • Addition of a 20 week endorsement to better fit the production and marketing cycles of range and inter-mountain operations • A change from the ‘formula live’ AMS price series to the ‘formula carcass’ AMS price series converted to a live basis by use of the dressing percent to establish coverage

21. 2009 ARH Cherry Pilot Program Washington: Adams, Benton, Chelan, Douglas, Franklin, Grant, Klickitat, Okanogan, Walla Walla and Yakima

22. 2009/2010 ARH Cherry Pilot Huge increase in business in 2009 with 23,172 acres insured - $151 M in coverage and as of 2/8 $23.4 M in losses with many still being worked. Problems with Warehouses not accepting fruit. RMA met with hundreds of industry representatives and AIP’s and worked through all the issues as best we could providing maximum flexibility within the constraints of the policy 2010 Business looks promising even after the problems we had in 2009. Policies sold increased from 955 to 1,062. RMA modified the quality standards in Washington to reflect Washington’s Marketing Order and revised the Underwriting Guides and Loss Standards

23. Common Crop Insurance Policy2011 Crop Year

24. Yield & Revenue Policies Combined • Probably the single most important and fundamental change in the program in over 20 years – big rollout planned this year • One policy will provide yield protection, revenue protection, revenue protection w/the harvest price exclusion • CRC(Crop Revenue Coverage), RA (Revenue Assurance), IP (Income Protection), and IIP (Indexed Income Protection) are replaced by the following two new plans of insurance: • Revenue Protection • Revenue Protection w/the Harvest Price Exclusion

25. Partnership Agreements • The Risk Management Agency (RMA) is committed to Alaska, Idaho, Oregon, and Washington agricultural producers by: • Providing Risk Management information and training, • Establishing research projects to create additional tools for farmers/ranchers to better manage their risks, and • Providing community outreach to traditionally underserved producers. • The Agriculture Risk Protection Act of 2000 (ARPA) earmarked funds for RMA to form “partnerships” with public and private organizations. Alaska, Idaho, Oregon, and Washington agricultural producers have benefited from over $13.6 million since FY 2001, foroutreach, education, and research. • 2010 Announcement Published in Federal Register

26. Washington Partnerships (active in 2010) OUTREACH Partnerships “Building Blocks for Risk Mitigation for Socially Disadvantaged Farmers and Ranchers” Rural Community Development Resources Provide outreach and technical assistance to underserved/unserved farmers/ranchers to meet RMA’s strategic goal of ensuring their customers and others are well informed. “Mobile Workshops for Women, Underserved, Latino and Socially Disadvantaged Farmers and Ranchers” Washington State Department of Agriculture Help Latino and women producers understand the variety of risk management tools available to help make risk management choices to better manage their farms in Washington State. Education SMALL SESSION Partnerships “Risk Management Training for Washington Livestock Producers.” Custom Ag Solutions Provide risk management training opportunities for 250 Washington livestock producers expected to participate in the 2009 Washington Cattlemen’s Association Annual Meeting.

27. USDA Risk Management Agency Spokane Regional Office Dave Paul, Director 11707 E. Sprague Ave, Suite 201 Spokane Valley, WA 99206 509-228-6320 www.rma.usda.gov 1-800-205-9953 Toll Free

28. Farm Risk Plans • RMAs New Online Resource Tool • USDA Risk Management Agency home page • http://www.rma.usda.gov/ • OR • http://farm-risk-plans.usda.gov/